Rental scams are nothing new -- they've been around as long as rentals have. But they're getting more frequent and harder to spot.
Kimberly Sears, Director of Menkes Condominium Rentals, has seen this shift first-hand. Document forgeries from scam artist tenants have become more and more sophisticated, she says, and many scammers appear to be working within a larger network.
"It comes up more when it's a landlord's market,” Sears tells STOREYS. "Offers are coming in quicker, so prospective tenants don't think people will look as in-depth. On the surface, the documents they provide position the applicant as a great tenant, it almost seems like there’s no reason not to accept them.”
From both her own experience overseeing rental applications and speaking with external landlords, Sears has observed a noticeable increase, over the past two months, of bad-faith applicants submitting falsified personal information, job letters, and bank statements. These applicants will often be so thorough as to create fake bank deposits and paystubs from the companies they supposedly work for that exactly match the salary information in the job letter.
Sears points to a rental application that came through the Menkes Condominium Rentals office that a colleague was looking to approve. Sears Googled the address provided and found that although it linked to a real company, it had a different name than was on the application.
"I followed up with a company listed on an application, and when I questioned how long the person was at this address I discovered the applicant had no affiliation with it. The person I spoke to said, they've been sending [the scammers] cease and desist letters for over two years and that half the documents they get to their office are eviction and tribunal letters," Sears explained. "So you have to figure if I'm just one, how many others are out there?"
Although this is a rare example for Menkes -- scam artists tend to stay away from larger rental companies, Sears says -- it's indicative of what she's been seeing: long-running, sophisticated scams that appear to be organized by a larger network.
"It's almost like it's one company that organizes these people, that distributes the documents. You're getting different people's photo IDs -- these are legitimate, Canadian photo IDs, the name is an actual person -- but everything else is fake. And then you start noticing they use the exact same fake documents over and over for different landlords," Sears explains.
The rental scams, Sears says, are likely just a small piece in a larger scam operation, but they can have profound effects on a landlord's business. With an extensive backlog at the Landlord and Tenant Board (LTB) that has landlords waiting, on average, eight months for an eviction hearing, these scams put landlords at risk of losing tens of thousands of dollars in income.
"[The scammers] can get someone into a unit for 10 to 12 months without any repercussions," Sears said. "At $2,000 minimum a month, that's a good $40,000 they're ripping off someone. Add on to that how backlogged the tribunal is, it just doesn't help them.
Sears would like to see changes to Residential Tenancies Act that would better protect landlords against bad-faith tenants, especially those using the LTB backlog to their advantage. But as for what can be done right now, the best way landlords can protect themselves, she says, is to employ the help of a professional rental management company. Menkes Condominium Rentals, for example, acts as a buffer between landlords and tenants, and has a team of professionals who work to thoroughly vet rental applicants through a variety of steps, including pulling a credit report -- something that's both a precaution and a scam deterrent.
Menkes Condominium Rentals typically work with individual owners who have bought a Menkes-built condo unit, but have begun expanding to outside buildings based on demand. Their rental service handles everything from finding tenants to dealing with maintenance issues so that there's no direct contact between landlords and tenants.
But it's not just landlords who can benefit. Their service also offers protections to tenants because, as Sears notes, "as much as there are both bad and professional tenants, there are bad landlords out there." In fact, scam landlords are something Menkes has also seen quite a bit of. In these scenarios, the scammer will often post fake listings with photos taken from a Menkes ad and request a first and last month's rent deposit from an unknowing tenant.
"We’ve seen unfortunate situations where someone has given a deposit for a unit that isn’t actually available and they’ve paid a hefty sum to someone they met online, who very convincingly made it appear as their own unit.”
When it comes down to it, rental management services like those provided by Menkes allow both sides to have a better, and safer experience, knowing that parties on both ends of the deal have been thoroughly vetted by professionals, Sears explains.
"Yes, I can operate a pair of scissors, but I guarantee you, my hairdresser could do a better job. Hiring a professional definitely helps to minimize your exposure to risk."